Core Viewpoint - CoinShares International Limited reported solid performance in Q2 2025, driven by a significant recovery in digital asset pricing, with Bitcoin increasing by 29% and Ethereum by 37% during the quarter [3][4]. Financial Highlights - Total management fees for Q2 2025 reached $30.0 million, an increase from $28.3 million in Q2 2024 [7]. - Capital Markets income was $11.3 million, down from $14.6 million in Q2 2024 [7]. - Adjusted EBITDA for Q2 2025 was $26.3 million, compared to $25.5 million in Q2 2024 [7]. - Net profit for the quarter was $32.4 million, slightly up from $31.8 million in Q2 2024 [7]. - Earnings per share (EPS) for Q2 2025 was $0.49, compared to $0.47 in Q2 2024 [7]. - Total comprehensive income for Q2 2025 was $33.0 million, up from $32.6 million in Q2 2024 [7]. Operational Highlights - CoinShares Physical generated $170 million in net inflow, marking the second strongest quarter on record, with management fees of $6.8 million [8]. - Assets under management (AuM) grew to $3.46 billion at the end of Q2 2025, up from $2.75 billion at the end of Q1 2025, reflecting a 26% growth driven by rising digital asset prices [8][9]. - The Capital Markets business unit generated total income and gains of $11.3 million, demonstrating operational resilience [10]. Treasury Management - Treasury management reported $7.8 million in unrealized gains, recovering from a $3.0 million loss in Q1 2025 [11]. Strategic Growth Plans - The company aims to reinforce its European leadership while expanding into the U.S. market, with plans for a U.S. listing [5][6]. - The favorable regulatory environment is seen as an opportunity to capitalize on crypto innovation [7]. Performance Comparison - The BLOCK Index delivered a 53.7% return, outperforming Bitcoin and traditional equity benchmarks like the S&P 500 and MSCI World [15]. Capital Markets Contributions - ETH Staking was the largest contributor to Capital Markets performance, generating $4.3 million during the quarter [16]. - Liquidity Provisioning income was $1.5 million, reflecting a slight decline from Q1 [16]. - Delta Neutral Trading Strategies and Lending generated $2.2 million and $2.6 million, respectively [16].

Core Insights - The Federal Reserve's new regulatory vice-chair, Michelle Bowman, announced the launch of a "crypto asset sandbox regulatory pilot" allowing compliant institutions to test cryptocurrency custody, lending, and derivatives innovation, while significantly reducing the capital requirement for banks holding crypto assets from 1250% to 800% [1][3] Group 1: Market Reaction - Following the announcement, Bitcoin's price surged from $117,000 to $123,000 within one hour, marking a new high for 2025, while XBIT's trading volume exceeded $28 billion in a single day, with institutional users accounting for 65% of the total [1] - XBIT's native token, XBT, saw a daily price increase of 90%, surpassing $175, as 30% of new institutional users were from Wall Street hedge funds and 20% from European family offices [3] Group 2: Regulatory Framework - Bowman's speech introduced a tiered regulatory framework for stablecoins, where bank-affiliated issuers would face lower capital requirements but must deposit 100% of reserves in Federal Reserve accounts, while tech-based issuers must provide daily on-chain reserve proof and undergo third-party audits [3] - Following the policy announcement, Circle's stock surged by 18%, while the algorithmic stablecoin FRAX dropped by 25% due to compliance risks [3] Group 3: Technological Innovations - XBIT launched a "sandbox compliance toolkit" that automatically generates regulatory-compliant audit reports through smart contracts, attracting traditional financial institutions [3] - The platform also introduced a "multi-chain stablecoin aggregator" that allows users to exchange stablecoins compliant with different regulatory standards, achieving a trading volume of $4 billion within four hours of launch [3] Group 4: Regulatory Challenges - XBIT upgraded its privacy protocol using zero-knowledge proof technology to allow users to complete compliance verification without revealing transaction details, which led to an anti-money laundering investigation by the CFPB [4] - Despite XBIT's disclosure that 98% of institutional users had completed compliance checks, market panic ensued, causing Bitcoin's price to drop by 7% within an hour [4] Group 5: Strategic Partnerships - XBIT announced a strategic partnership with JPMorgan to launch "compliant leveraged trading services," enabling users to participate in Bitcoin perpetual contracts directly through bank accounts, with leverage up to 50 times [6] - Following the announcement, JPMorgan's stock rose by 3.2%, and XBIT's perpetual contract open interest surged by $8 billion within two hours [6] Group 6: Industry Outlook - The interplay of the Federal Reserve's policy shift, XBIT's technological advancements, and the entry of traditional finance has propelled the cryptocurrency market to new heights, although regulatory scrutiny remains a significant concern [6] - Bowman's statement emphasized that regulation will not compromise innovation, while XBIT's founder asserted that true innovation does not require compromise but rather reshapes the rules [6]